For immediate release
31 January 2025
RACING INDUSTRY WELCOMES GOVERNMENT TAX PROPOSAL FOR BLOODSTOCK INDUSTRY
The Racing Industry has welcomed the Government’s determination to ensure the racing industry is not disadvantaged by Inland Revenue’s treatment of GST deductions claimed by bloodstock investors.
Racing Minister Rt Hon Winston Peters today announced that the Government is preparing for public consultation on the proposed adjustments, which are designed to reduce compliance costs for bloodstock investors and place the bloodstock sector on a more equal footing with its Australian counterpart.
TAB NZ General Manager Jason Fleming said bloodstock investing often takes the form of joint ventures. This helps with affordability of the initial purchase price and ongoing costs such as stabling and training.
A common practice for many years has been for investors to individually claim GST deductions on their own GST returns. However, Inland Revenue recently ruled against this, meaning that investors would incur compliance costs for registering and filing GST returns for each horse separately every one or two months. The Government is now proposing to take a pragmatic approach and adjust tax policy to avoid imposing these extra compliance costs.
“New Zealand breeds some of the best thoroughbred and standardbred horses on the planet,” said Mr Fleming.
“We are pleased the Government understands the challenges facing investors and is willing to consider practical assistance to ensure the bloodstock industry can continue to grow and further its contribution to our economy.”
Bloodstock breeding produces nearly $400 million in value-added contribution to the New Zealand economy within the $1.9 billion contributed by the wider racing industry.1 A significant proportion of the foal crop is sold overseas each year, contributing to the nation’s export earnings.
The breeding industry had been facing serious challenges even before the recent change in the treatment of GST. From 2003 to 2023, the output of foals decreased by 42 percent (from 5,156 to 2,972), resulting in the number of horses being trained falling by 36 percent (from 8,983 to 5,732).
The Government’s initiatives are supported by the wider racing industry, who collectively have proposed the initiatives, including the New Zealand Thoroughbred Breeders’ Association, whose CEO Nick Johnson said:
“The New Zealand thoroughbred breeding industry is deeply rooted in the country's heritage and economy yet has faced contraction in the foal crop over the last 15 years. To stabilise and grow this vital industry, attracting new investment and supportive policies are essential—not just to sustain domestic racing, but to elevate New Zealand's global racing reputation and economic impact.”
-ends-
ABOUT TAB NZ
TAB NZ is a statutory body established under the Racing Industry Act 2020. Its objectives are to facilitate and promote betting for the benefit of New Zealand racing and sport while minimising the risks of problem and underage gambling. In the 2023/24 financial year it provided funding of over $225m to the New Zealand racing industry and $26.5m to New Zealand sporting bodies, as well as $11.1m to Government in levies and taxes. TAB NZ’s betting operations are delivered by sports betting and gaming group Entain under a 25-year strategic partnering arrangement that began in June 2023.
For more information please contact:
Kaylea Nightingale
Executive Assistant Manager
kaylea.nightingale@tabnz.org
1Link to the IER size and scope report
